Louisville appears ready to extend a generous incentive package to Alfalfa's Market to entice the natural foods grocer to locate at a site in the city where a Safeway has sat empty for more than two years.

City Council is scheduled to take up the business assistance package Tuesday night.

Under the deal, Alfalfa's would see a rebate of its sales tax revenues for the first three years of operation -- capped at $800,000 -- and a rebate of half of the construction use taxes and permit fees it would owe the city for building a $3.4 million, 22,000-square-foot store at the corner of South Boulder Road and Centennial Drive.

Louisville would also pledge a $150,000 contribution to the creation of a 1,000-square-foot community room within the project. In return, the city would have free access to the room for at least 10 hours a week.

Mayor Bob Muckle said the city's offer is unprecedented but so is the challenge of rejuvenating the Village Square Shopping Center, which has fallen on hard times since Safeway closed down in May 2010.

"It's way more than we've done before and more than we'll probably do again," Muckle said Monday. "But it's worth it because of the dramatic impact it will have on the neighborhood."

Alfalfa's, which has a single store in downtown Boulder, would most likely arrive in Louisville as part of a 110-unit to 120-unit residential community being pitched by developer Jim Loftus.

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The city hopes the store will pump life back into a beleaguered shopping center that has been rife with vacancies and features an expansive, empty parking lot.

"The real aggressive package is appropriate because it doesn't just fill the (Safeway) space, it will drive the redevelopment of the site," Muckle said.

The city expects a fully functioning Alfalfa's to generate $3 million in sales tax revenues over a 10-year period and employ 100 full-time and part-time workers.

City Manager Malcolm Fleming said it's important to extend to Alfalfa's an attractive offer since the grocer is considering locations other than Louisville for its second store. And it's been no secret, Fleming said, that getting a developer to take on the 5-acre site has not been easy.

"It's a combination of a long-term financial benefit to the city and the challenges of that particular site," he said.

Earlier this year, Loftus brought before the city a plan to build at the site a high-end apartment complex with 160 units but vociferous community opposition to the plan helped sink it in June, when the city council turned it down.

Loftus returned a few weeks ago with his new proposal, featuring an Alfalfa's, and immediately won praise from neighbors who had always voiced a desire to keep Village Square a largely retail district.

Regardless of what happens with the proposed business assistance package for Alfalfa's, the larger development plan must still get approval from the city before anything can move forward. The Louisville Planning Commission gets a first look at the project later this month.